On Wednesday, the Rupee ends flat as it closes at 95.83 per dollar, up from 95.98 in the previous session. The Indian rupee was among the worst performers in Asia this quarter and over the last 30 days, hit by worries over elevated crude prices and surging global bond yields that added to headwinds for local assets. The currency declined 0.7% on the month and 1.2% in the July-September quarter, averting steeper losses largely on the back of persistent interventions by the Reserve Bank of India. The South Asian unit navigated a tumultuous quarter which saw benchmark Brent oil prices swing between $70 per barrel and nearly $110 as conflict between the US and Iran ebbed and flowed. The Reserve Bank of India's monetary policy decision next week is expected to be a key driver, with markets widely anticipating a 25 basis point hike. The dollar retreated against major currencies on Wednesday following data showing a smaller-than-expected increase in US inflation, which reduced market bets on an interest rate hike from the Federal Reserve. US Commerce Department data showed that the Personal Consumption Expenditures Price Index, the Fed's preferred inflation gauge, rose 0.3% last month. Sterling hit a 6-week high versus the euro on Wednesday after data showed the UK economy grew faster than previously expected in the second quarter, cementing expectations for an interest rate hike by the Bank of England by the end of this year. The pound edged up 0.4% to a one-week high of $1.3292, recovering from a three-month low it hit in the previous session. Against the euro it was at its highest since mid-August, with the euro down nearly 0.3% at 85.43 pence. Also helping the pound gain on the dollar were comments from prominent US Federal Reserve policymaker John Williams who said there was "no need for urgency" in raising rates. Dollar strength has weighed on the pound this month and wiped out gains for the quarter. Sterling is set for its biggest monthly loss in nearly a year and is set for a flat end to the third quarter The euro rose 0.19% to $1.1361. The single currency is still headed for a monthly loss against the dollar after two consecutive months of gains. The dollar also weakened 0.31% to 156.79 yen and was down 0.05% versus the Swiss franc . Gold prices extended gains after a softer-than-expected US inflation reading hurt the dollar and raised hopes that the Federal Reserve might not raise interest rates again as soon as October. Spot gold was up 0.7% at $4,209.71 per ounce as of 9:05 a.m. ET (1305 GMT). However, prices were down 5.4% in September so far. US gold futures gained 1.5% to $4,241.90. Spot silver fell 0.5% to $61.15, platinum rose 0.4% to $1,711.77, and palladium eased 0.1% to $1,221.36. All three metals were poised for monthly declines.
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The fortunes of the euro, trading not far off its lowest levels of the year against the dollar, are in the grip of a global energy shock and growing political risk in Europe. The euro was heading towards $1.20 in August, but has fallen around 2% this month to two-month lows of just below $1.14 . While a US rate rise that has restored the Fed's inflation-fighting credentials has bolstered the dollar, the euro's outlook has also been muddied by politics and a renewed rise in oil prices that could hurt an economy that has held up better than expected. Australia's central bank raised its cash rate to a 15-year high of 4.60% on Tuesday in its fourth hike of the year, saying inflation was too high and it was prepared to hike further if needed. Wrapping up its September policy meeting, the Reserve Bank of Australia board voted unanimously to lift rates by 25 basis points, bringing the tightening this year to a full percentage point. The board said some of the upside risks to inflation were materialising with energy costs high and productivity weak at home. Oil prices and bond yields rose in an uncomfortable combination for stocks on Tuesday, as investors braced for an era where short-term borrowing costs settle at their highest levels in years. Australia raised its cash rate to a 15-year high, as expected, and market participants have bet on it going higher still. The benchmark 10-year US Treasury yield spiked to a 19-year high above 5.27% on Monday for a rise of nearly 50 basis points through September. Yields rise when bond prices fall and the monthly selloff is the heaviest for two years. Sovereign yields are an anchor for global markets, a reference price for investing in riskier stocks and a benchmark for mortgages and corporate borrowing. Higher rates mean pressure on government, corporate and household budgets.......